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VCE Business Management 3/4 2017 > Types of Businesses > Flashcards

Flashcards in Types of Businesses Deck (7)
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Sole Trader: Define, Features, Advantages and Disadvantages.

Def: A sole trader is a business owned by one person.

Feat: unlimited liability, registered in the Australian Securities and Investments Commission (ASIC),

Ad: No tax upon businesses profits only personal income, low start up cost, complete control over the company.

Dis: Unlimited Liability, difficult to raise funds for expansion, burden of management.


Partnership: Define, Features, Advantages and Disadvantages.

Def: A business with a minimum of 2 and a maximum of 20 owners.

Feat: Unlimited liability including for partners debt, silent partner, min 2 max 20 owners.

Ad: pooled funds and talent, only have to pay tax on personal income not businesses profits, shared responsibility and workload.

Dis: Unlimited Liability, possibility for disputes, a division in authority and loyalty


Incorporation: Define, Features, Advantages and Disadvantages.

Def: a process in which a business becomes an company.

Feat: Limited Liability, Private and Public companies.

Ad: separate legal entity (Limited Liability), easy transfer of ownership, experienced management through a board of directors.

Dis: cost of formation, double taxation, requirement to public annual report.


Public Listed Companies: Define and the Features

Def: An incorporated business with a minimum of 5 shareholders, whose shares are freely traded on the Australian Securities Exchange (ASX)

Feat: Registered on the ASX, min of 5 shareholders, min of 3 directors, Ltd is after its name, audited accounts each year.


Private Listed Companies: Define and Features

Def: An incorporated company with a minimum of 2 and a maximum of 50 private shareholders who are chosen by the company for whom they wish to own the business

Feat: Limited Liability, min of 2 and a max of 50 shareholders, Pty Ltd is after its name


Social Enterprise; Define, Features, Advantages and Disadvantages.

Def: A Business with the main objective is to fulfil a social need.

Feat: primary objective is to fulfill a social need, any profit made goes back into the business.

Ad: can open up new markets, meeting a social need can increase profit and market share.

Dis: Difficulty obtaining initial funds to start business, significant operating cost, it can be difficult focusing on both the financial and social need.


Government Business Enterprises (GBN): Define, Features, Advantages and Disadvantages.

Def: a type of business that is owned and operated by the government.

feat: owned by the government, goal is to make a profit, community services.

Ad: able to carry out government policies delivering community services, can operate with some independence from the government, provides healthy competition to other businesses.

dis: political interference in day to day operations, inefficiencies caused by the government excessive regulation.